Sustainability KPIs Every Company Should Track: Water Stress

Sustainability has been synonymous with carbon emissions, renewable energy and the like. But many companies are starting to rethink what it means to be “sustainable.” The same with investors and consumers, who are asking for a more comprehensive look into organizations’ corporate social responsibility (CSR) programs and performance.

Welcome to Sustainability Reporting 2.0

Sustainability Reporting 2.0 is a new era that combines financial and non-financial factors to paint a clearer picture of the risk, reward and outcomes of sustainability efforts. Such reporting provides intricate details on the inner workings of an organization across a wider spectrum that can be used to set measurable goals and implement changes, which ultimately leads to better reporting and management — and greater returns.

What’s Driving the Evolution?

New supply chain and compliance requirements. Large supply chain companies, such as Wal-Mart, are demanding that even vendors a step or two downstream from the product provide sustainability reporting data that goes beyond environmental. Meanwhile, increased legislation worldwide is making reporting mandatory and more comprehensive.

Resource risk mitigation concerns. As resources become scarcer, companies increasingly need to asses risk tied to all reserves and utilities. This includes water, which is critical to all aspects of an operation, especially manufacturing processes. At the same time, organizations are more concerned with their sustainability and social responsibility reputations in the minds of consumers, shareholders and governments. For example, 84 percent of consumers feel a responsibility to address social and environmental issues and make purchasing decisions accordingly, says the 2015 Cone Communications Global CSR Study.

Better operational savings.Holistic tracking and reporting is an essential component of uncovering opportunities to make cost-saving improvements, decrease risk and become proactive rather than reactive.

In the following Q&A, our experts dive into a critical KPI:

Water Stress

Throughout the world, water scarcity continues to be a concern. Droughts in areas from Brazil to Southeast India have had a devastating impact on residents and businesses alike. Companies must adjust their operational strategy to make sure they’re reducing, and where possible, reusing water to ensure the most efficient and practical use of a finite resource.

Q: What are we talking about when we say water stress or risk?

A: Water stress assessments evaluates a company’s water use and potential risks relative to water quality and water availability in that region. Tracking water is extremely important for companies with supply chain and operations that consume a significant amount of water, especially if water is a material source for their day-to-day operations.

Q: How do companies get water data for their region?

A: Tools are available for companies and organizations to assess and communicate their water use and risks relative to water availability in their global operations and supply chains. Some of these tools include the Water Footprint Network’s Water Footprint Standard, the World Business Council for Sustainable Development’s Global Water Tool, the GEMI’s Water Sustainability Tool, and the World Resources Institute’s Aqueduct Tool.

Q: What are meaningful water metrics?

A: To get a good metric for water use, measure total water use and consumption at your facilities and through your supply chain. Water can be tracked in gallons or liters, but normalizing water data with revenues, production levels, or employee count can provide clearer insight into what is happening at the facility and the ability to benchmark across other facilities year by year.

Q: What should companies report?

A: Companies typically establish water reduction goals and communicate these goals for their water-stressed sites. Companies then implement water reduction initiatives to help alleviate these risks. Examples of such initiatives include installing water recycling systems to treat wastewater for reuse, installing high-efficiency water products, reducing landscape water use, and educating employees on proper water use and company goals.